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Recently, I blogged about the SCOTUS’s decision to deny cert in a case challenging the constitutionality of the SEC’s “neither admit nor deny” settlement policy.  On the heels of that decision, the 5th Circuit held last week that appellants who entered into a settlement with the SEC that included this language weren’t entitled to relief from the judgment confirming it. The appellants contended that the settlement was void to the extent that it incorporated the no-deny policy, which they claimed violated the First Amendment and denied them due process. Here’s an excerpt from the Jim Hamilton Blog’s discussion of the case:

The U.S. Court of Appeals for the Fifth Circuit affirmed the Texas District Court’s holding that the SEC’s 1972-initiated no-deny policy included in the defendants’ signed 2016 settlement agreement with the Commission did not void the judgment on constitutional grounds under Federal Civil Procedure Rules 60(b)(4) or (5). The court of appeals declared that Rule 60(b)(4) or (5) would void the settlement on due process or First Amendment grounds only if either the lower court did not properly have personal or subject matter jurisdiction over the defendants or the defendants were not provided actual notice of the case or an opportunity to be heard, all of which were proper and not contested by either party in 2016.

The 5th Circuit hasn’t exactly championed the SEC’s authority in recent months, so this result may look a little surprising. But the blog says that there may be another shoe yet to drop, because the two concurring judges said that the decision doesn’t address the policy’s merits, and that in light of the SEC’s current activism, it or another court may be “called upon in the near future to decide whether the policy remains or is struck down.”

– John Jenkins